Not sure what to do

UnhappyBadger

I am new to the forum and after many sleepless nights and worrying I feel that bankruptcy is eventually going to catch up with me.

Long story short (please bear with me) - I'm a contractor who works through a Ltd company who has been trying to juggle unsecured debt for many years. I'm currently separated from my wife and daughter, living at my mum's. My wife quit her job 2 years ago due to mental health issues and hasn't worked since or made any effort to claim benefits. Unfortunately she hasn't curbed her appetite for living beyond her means and constantly eats out or buys branded clothes/trainers for our daughter, expecting me to fund by using access to my daughter to guilt trip me into providing extra money whilst I struggle to pay the bills, run my company and pay my unsecured creditors.

I was recently out of work for 3 months and have managed to live off savings until this month where I am faced with being unable to pay my unsecured creditors (something I have never done for over 15 years) and will struggle to even pay the household bills and mortgage.

My limited company owes around £15k due to loans (which I am personally guaranteed against) and I will struggle to pay my next VAT quarter. I have personal loans and credit cards totalling £70k and my personal tax is due in January for around £8000 which I can't afford to pay. I think there's around £50K of equity in my property (so probably around £25k for me based on a 50/50 split) however I am unable to get it valued as my wife is the middle of a spring clean (which has lasted 18 months) and is dragging her heels tidying the property so we can have it valued with a view to sale (my wife is extremely difficult to deal with).

The stress of my marriage breakdown, not seeing my daughter regularly, being out of work and not being able to afford my household bills (let alone my unsecured creditors) is causing me a lot of stress which doesn't help as I have struggled with depression for many years.

I do worry about an IPA as my contracts are often short term (3 months) with gaps of no work between (with no income). The contract market is struggling ATM due to Brexit and changes to the tax laws which will be introduced in April 2020 so I often have to save some income to pay bills when I'm not working and actively looking for a new contract (which could involve travel across the country and staying away as I have to be available wherever the work is). Being a contractor I also don't get paid for any time off ill.

I've never struggled like this before in my life and have always been able to pay my way without living any kind of extravagant lifestyle.

I'm not looking for sympathy and I'm aware that my share of the equity would be used by the official receiver to pay towards my unsecured debt (which was always going to be case if I had sold it). I'm also not looking to "dodge" any responsibility for paying towards an IPA however my income is not guaranteed and even though I'm not living at my property my wife and daughter are there with no way to pay the bills.

I'd just like some advice on whether bankruptcy is the best option or should I try a DMP (I don't think an IVA would work as my income would be sporadic).

I'm in my mid fifties so I worry that I will never be able to get another mortgage if I go bankrupt.

Kind Regards

TheGardener

Sorry to hear you are going though a rough time - you are not alone. Remember there is no financial problem or debt that doesn't have a solution.

First up - you need to talk to Business debt line - they are free and will advise you on the options open to you.

If you haven't already started - you will need to sit down with a couple of sheets of paper and do a really thorough assessment of all your debts and assets. Give yourself a couple of hours and get it ALL out on the page.

This is about taking control of the future - these are the first steps in getting on top of things and being able to move forward.

mwarby

Debts - 85K
Assets -25K

You don't state your income, but a DMP to clear 60K of debts will be a struggle, especially as you have roughly 15 years before retirement

You worry about the ability to get a mortgage, but given your age and a lack of deposit I can see this being a struggle, even excluding the debts.

I think liquidation for company and personal bankruptcy would be the way to go. This way dealing with house is ORs problem, and you'll be debt free in 3 years max. Once your free and clear you can try to save for a deposit after about 5-6 years(after start of bankruptcy) the mortgage impact will be pretty low

UnhappyBadger

Thanks for your comments.

I'm going to speak with Business Debt Line tomorrow

debt_doctor

Hi,

I will leave the business aspect to Business Debtline, you need to decide (with their help) whether your business is viable going forward.

Ultimately, I can't see anything else than a personal bankruptcy on the horizon unless your business does significantly better. Once you get to the stage of being unable to pay Tax / VAT the Inland Revenue will be looking to make you bankrupt.

If / when you become bankrupt, the following will happen:

Your house will be sold once a year has passed since you were declared bankrupt, and your ex and daughter will have to find somewhere else to live, either by private rent or via the Homeless Legislation.

You will not be able to continue to give 'excessive' financial support to your daughter other than the correct level of child maintenance. Your Ex WILL have to claim benefits for herself and her daughter, probably Universal Credit, which will incorporate an element for her self, your daughter, the rent plus child benefit and help with the council tax. In addition, your ex might be able to claim Personal Independence Payment (PIP) if her mental health issues are substantive.

In an IPA, there are several was to look at this. It could be looking at the previous years working pattern and using an average, or could stop and start / vary the IPA according to your working pattern.

The above perhaps doesn't make great reading, but at least it means that this spiral for you will stop and you will be in a place to move forward being solvent.

Your ex doesn't seem to be coping / taking her responsibility for herself and her daughter - eventually she will have to.

DD